Insight: Seeing Global Economic Recovery after US-China Deals

JAKARTA (TheInsiderStories) – Good Morning! United States (US) President Donald Trump again sent a confusing signal on the progress of trade deal with China. While Beijing looking carefully at the political situation in the US including the impeachment hearings and the presidential election before finalizing the “phase one” pact.

On the same day, Trump also said he might be willing to testify in the impeachment inquiry even though he said do nothing wrong on the House Democrats accused. He tweeted,”I don’t like giving credibility to this No Due Process Hoax, I like the idea & will, in order to get Congress focused again, strongly consider it!”.

While, North Korea‘ foreign ministry adviser Kim Kye Gwan said it’s not “interested” in further meetings with the US, a day after the American president tweeted a message to the country’s leader Sunday saying “See you soon!”. Kim suggested that Washington is trying to portray “advancement in the Korean Peninsula issue” but that it was a delay tactic.

From Indonesia, the worse economic data showed up. Finance ministry Sri Mulyani Indrawati reported two months before the end of 2019, the government spending just 68.60 percent of this year’s target or worth of Rp 1,121.1 trillion and the regions spending were Rp676.9 trillion, or 81.9 percent of 2019′ targets.

The Financial Services Authority revised the projected loan growth between 8 – 10 percent on an annual basis (YoY) from initially around 12 percent. Based on the latest data, in nine months, the banks have disbursed loans Rp5,464.97 trillion (US$390.35 billion), up 7.89 percent (YoY).

Citing on Bank Indonesia’s report, the slowdown in credit growth was caused by corporate demand. The central bank noted, lending to big debtors amounted to Rp2,783.1 trillion or slower to 8.1 percent from 9.4 percent in the previous month.

Furthermore, referring to the Indonesian Automotive Industry Association data, car sales recorded 847,164 units during January – October from the same period in 2018 at reached 945,159 units, or decline of 10.36 percent (YoY). The association had revised this year’s car sales target from 1.1 million units to 1.0 million units due to the sluggish automotive market in 2019.

Along with the lack of tax revenues, the finance ministry continues to issue government bonds. Today, the ministry will hold an auction with an indicative target of up to Rp30 trillion in seven series. At the auction on Nov. 5, the total incoming bids Rp67.97 trillion and the government won Rp24.25 trillion.

Based on the official data, the realization of net government bond issuances has reached Rp401.7 trillion or grew 17 percent until October (YoY). The amount has exceeded the ceiling that was originally set at Rp389 trillion in the 2019 State Budget.

On Monday, Indonesian Rupiah closed down 0.04 percent to Rp 14,079 a US dollar and the Jakarta Composite Index (JCI) fell 0.09 percent to 6,122.63. The analysts rated, the lack of domestic and global macroeconomic data releases has an impact on the financial market.

It said the global sentiments was affecting the market include the development of the trade war between and from the domestic side is still on a trade balance surplus of $160 million in October. During this week, the Federal Reserves (Fed) minutes meeting results will affect the movement of both instruments.

Minutes of the Fed’s meeting are considered to provide a clearer picture related to the development and views of the committee on the US economy after they were cut three times this year. While from domestic, a meeting of BI’ board of governors meeting on Nov. 21 become an influencing factor.

Today, the analysts viewed the local currency and the stock index will rebound. The Rupiah is estimating move in the range 14,111 to 14.153 over the Greenback and the JCI between 6,082 to 6,202 from a prior day.

The stock to be watch for today are PT Barito Pacific Timber Group Tbk (IDX: BRPT), PT Bank Central Asia Tbk (IDX: BBCA), PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), and PT Medco Energy International Tbk (IDX: MEDC).

In addition, PT Jasa Marga Tbk (IDX: JSMR), PT Telkom Indonesia Tbk (IDX: TLKM), PT HM Sampoerna Tbk (IDX: HMSP), PT Unilever Indonesia Tbk (IDX: UNVR), PT Gudang Garam Tbk (IDX: GGRM), PT Rimo International Lestari Tbk (IDX: RIMO), PT Vale Indonesia Tbk (IDX: INCO), PT Adaro Energy Tbk (IDX: ADRO), and PT United Tractor Tbk (IDX: UNTR).

May you have a profitable day!

US$1: Rp14,000

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia